Michael Foods’ egg division earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter 2007 fell 6 percent compared to the previous year due to egg cost pressures, the company reported last month. Net sales, meanwhile, for the quarter ending March 31, rose by 8 percent, reflecting improved volumes and pricing, says chairman and CEO Gregg Ostrander.
“We were generally satisfied with our first quarter EBITDA results nearly matching last year’s first quarter in the face of major cost challenges on the egg products sides of our business,” Ostrander says. “The substantial rise in corn and soybean meal costs year-over-year was a significant head wind. Although we have moved to raise egg products’ prices overall, we have not yet been able to offset the increase in the cost of goods sold. This is due, in part, to the length of customer contracts related to many of our high value-added egg products, but is also due to market-dictated pricing on food ingredient egg products not yet rising enough to cover the high egg costs,” Ostrander says.
The egg division’s net sales for the quarter were $229 million, up $16 million from 2006, while EBITDA for the first quarter was $30 million, $2 million less than last year.
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